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Shares instead of Payment

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    Shares instead of Payment

    Hi,

    I'm currently contracted to a company who have offered to pay my last couple of invoices in either cash or company shares. If I was to choose the shares, how would this affect my tax position?

    As the shares are being paid to my company, then my company would own the shares. How could I get the shares out of the company and into my name?

    If I wanted to buy shares in the clients company anyway, would it be better if I just bought them myself?

    Cheers,

    Paul.

    #2
    Makes no difference to the IR...you will still have to name your next born son after Gordo and hand over 50% of those shares to him too.

    Mailman

    Comment


      #3
      Any sensible answers?

      Comment


        #4
        Effectively there is a payment to your co of X - the value of the invoices accounted for as normally and then your co has effectively bought the shares for that value.

        YourCo does not get a capital gains tax allowance. Also you will want to ensure you remain a trading company (highly unlinkey you won't unless the value of the shares is huge). You will need to consider what value to place on the shares in your asset register.

        Now you also mention owning the shares yourself.

        You *could* simply destroy the invoices and get the client to register them in your nominees name, or if they insist simply fill out a stock transfer form and do it yourself. A problem with this approach is that it is at the very least false accounting and quite likely fraud.

        A reasonable way to do it would be transfer the shares to yourself via the stock transfer form (don't forget the stamp duty would need to be paid). You have then made a payment to yourself of the did price of the shares. You will need to account for this payment in the same way as any other drawings.

        This assumes there is a recognised market for the shares, if there is no it may be more difficult to obtain an independant valuation.

        Talk to your accountant.

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